Independence Holding Company Announces 2021 Third-Quarter and Nine-Month Results
11/09/2021 - 05:15 PM
STAMFORD, Conn., Nov. 09, 2021 (GLOBE NEWSWIRE) -- Independence Holding Company (NYSE: IHC) today reported 2021 third-quarter and nine-month results.
Financial Results
IHC reported a loss from continuing operations attributable to IHC, net of tax, of $11,512,000 or $.79 per share for the three months ended September 30, 2021 compared to a loss of $7,340,000 or $.50 per share for the three months ended September 30, 2020. Loss from continuing operations attributable to IHC, net of tax, of $23,514,000 or $1.61 per share for the nine months ended September 30, 2021 compared to a loss of $16,391,000 or $1.11 per share for the nine months ended September 30, 2020.
Net income attributable to IHC of $17,359,000 or $1.18 per share for the three months ended September 30, 2021 compared to $8,688,000 or $.59 per share, diluted, for the three months ended September 30, 2020. Net income attributable to IHC of $99,451,000 or $6.79 per share, diluted, for the nine months ended September 30, 2021 compared to $13,387,000 or $.91 per share, diluted, for the nine months ended September 30, 2020.
The Company entered into three transactions this year for the sale of (i) all of the shares of common stock of Madison National Life Insurance Company, Inc. (“Madison National Life”) to Horace Mann Educators Corporation, (ii) all of the shares of common stock of Standard Security Life Insurance Company of New York (“Standard Security Life”) to Reliance Standard Life Insurance Company and (iii) 70% of the Company’s pet business, including all of the shares of common stock of Independence American Insurance Company and the Company’s entire interest in 85% of the common stock of PetPartners, Inc. (“PetPartners”), to Iguana Capital, Inc. (“Iguana Capital”).
The Company completed the sale of PetPartners on June 30, 2021, and results for the nine months of 2021 include a gain on the sale of PetPartners of $62,229,000 net of tax. Also included in income from discontinued operations is the operating income from Madison National Life, Standard Security Life and Independence American Insurance Company. The gain on the sales of Madison National Life, Standard Security Life, and Independence American Insurance Company will be recorded when those transactions are consummated. They are currently pending regulatory approval.
The Company has also announced that it has entered into an Agreement and Plan of Merger with Geneve Holdings, Inc. its majority stockholder. Further information regarding the terms and conditions will be contained in a Current Report on Form 8-K filed with the SEC.
Chief Executive Officer’s Comments
Roy T. K. Thung, Chief Executive Officer, commented, “The Company is focusing on the consummation of the three sale transactions for the remainder of the year. Pro forma, including the third quarter results, and after all the transactions are closed, IHC projects that it will hold approximately $575 million in cash and investments, net of liabilities; our interest in Iguana Capital; and our health insurance agency and other assets, resulting in an estimated fully diluted book value of approximately $48.50 per share, which is calculated as if the transactions occurred and were recorded on September 30, 2021. Actual book value per share at September 30, 2021 was $38.47 as compared to $32.08 per share at December 31, 2020. These projections are based on information currently known to management and include the use of estimates and assumptions with regards to anticipated transaction costs, estimated tax rates and other potential changes.”
Mr. Thung added, “Our agency operations have been unprofitable, and we will continue to report losses from our agencies for the near term. We continue to expand our agency digital assets by enhancing our core platform, INSXcloud.com, a CMS approved Web Broker. We have expanded product offerings on the platform and have developed marketing initiatives to drive both direct and partner initiated traffic to the platform. We will continue to invest in and enhance these capabilities at our agency operations as we enter 2022 and work towards building a profitable agency operation.”
About Independence Holding Company
Independence Holding Company (NYSE: IHC), through our current subsidiaries, underwrites and distributes health, group disability and life, New York State DBL and paid family leave, and pet insurance. IHC underwrites policies in all 50 states, Washington D.C., Puerto Rico and the U.S. Virgin Islands through our three carriers: Independence American Insurance Company, Standard Security Life Insurance Company of New York (“Standard Security Life”) and Madison National Life Insurance Company, Inc. (“Madison National Life”). We also distribute products nationally through multiple channels, including our agencies, call centers, advisors, direct and affinity relationships, Web Broker, and web properties, including www.healthedeals.com ; www.healthinsurance.org ; www.medicareresources.org ; www.petplace.com ; and www.insxcloud.com . As previously announced, IHC has entered into stock purchase agreements to sell all of the issued and outstanding capital stock of Standard Security Life, Madison National Life and Independence American Holdings Corp., which includes Independence American Insurance Company and the remaining assets of IHC’s pet business, each subject to regulatory approval. To learn more, visit https://ihcgroup.com/ .
Forward-looking Statements
Certain statements and information contained in this release may be considered “forward-looking statements,” such as statements relating to management's views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the markets in which IHC operates, new federal or state governmental regulation, IHC’s ability to effectively operate, integrate and leverage any past or future strategic acquisition, and other factors which can be found in IHC’s other news releases and filings with the Securities and Exchange Commission. IHC expressly disclaims any duty to update its forward-looking statements unless required by applicable law.
INDEPENDENCE HOLDING COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME September 30, 2021 (In Thousands, Except Shares and Per Share Data)
Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 REVENUES: Net investment income $ 119 $ 170 $ 430 $ 916 Fee income 5,569 6,113 20,291 18,465 Other income 873 615 1,660 1,739 Net investment gains (losses) (48 ) (53 ) 105 122 6,513 6,845 22,486 21,242 EXPENSES: Selling, general and administrative expenses 21,592 16,431 53,028 43,221 Loss from continuing operations before income taxes (15,079 ) (9,586 ) (30,542 ) (21,979 ) Income tax benefits (3,567 ) (2,241 ) (7,026 ) (5,617 ) Loss from continuing operations, net of tax (11,512 ) (7,345 ) (23,516 ) (16,362 ) Discontinued operations: Total pretax income from discontinued operations 36,383 20,295 150,376 38,790 Income tax expense on discontinued operations 7,512 4,218 27,567 8,836 Income from discontinued operations, net of tax 28,871 16,077 122,809 29,954 Net income 17,359 8,732 99,293 13,592 (Income) loss from nonredeemable noncontrolling interests - 5 2 (29 ) (Income) loss from redeemable noncontrolling interests - (49 ) 156 (176 ) NET INCOME ATTRIBUTABLE TO IHC $ 17,359 $ 8,688 $ 99,451 $ 13,387 Basic income per common share Loss from continuing operations $ (.79 ) $ (.50 ) $ (1.61 ) $ (1.11 ) Income from discontinued operations 1.97 1.09 8.40 2.02 Basic income per common share $ 1.18 $ .59 $ 6.79 $ .91 WEIGHTED AVERAGE SHARES OUTSTANDING 14,654 14,670 14,645 14,763 Diluted income per common share Loss from continuing operations $ (.79 ) $ (.50 ) $ (1.61 ) $ (1.11 ) Income from discontinued operations 1.97 1.09 8.40 2.02 Diluted income per common share $ 1.18 $ .59 $ 6.79 $ .91 WEIGHTED AVERAGE DILUTED SHARES OUTSTANDING 14,654 14,670 14,645 14,763
As of November 9, 2021, there were 14,674,936 common shares outstanding, net of treasury shares.
INDEPENDENCE HOLDING COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands)
September 30, 2021 December 31, 2020 ASSETS: Investments: Securities purchased under agreements to resell $ 25,458 $ 23,962 Fixed maturities, available-for-sale 29,070 44,003 Other investments 2,050 1,928 Total investments 56,578 69,893 Cash and cash equivalents 7,946 17,215 Investment in Iguana Capital, Inc. 33,475 - Funds held in escrow 78,263 - Other assets 33,975 49,475 Assets attributable to discontinued operations 995,383 946,573 TOTAL ASSETS $ 1,205,620 $ 1,083,156 LIABILITIES AND EQUITY: LIABILITIES: Accounts payable, accruals and other liabilities $ 39,817 $ 28,387 Liabilities attributable to discontinued operations 601,253 582,651 TOTAL LIABILITIES 641,070 611,038 Commitments and contingencies Redeemable noncontrolling interest - 2,312 STOCKHOLDERS’ EQUITY: Preferred stock (none issued) - - Common stock 18,625 18,625 Paid-in capital 125,357 124,757 Accumulated other comprehensive income 2,320 4,197 Treasury stock, at cost (77,247 ) (77,088 ) Retained earnings 495,498 399,273 TOTAL IHC STOCKHOLDERS’ EQUITY 564,553 469,764 NONREDEEMABLE NONCONTROLLING INTERESTS (3 ) 42 TOTAL EQUITY 564,550 469,806 TOTAL LIABILITIES AND EQUITY $ 1,205,620 $ 1,083,156